Correlation Between Franklin Templeton and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Franklin Templeton and Stone Harbor at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Templeton and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Templeton Limited and Stone Harbor Emerging, you can compare the effects of market volatilities on Franklin Templeton and Stone Harbor and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Templeton with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Templeton and Stone Harbor.
Diversification Opportunities for Franklin Templeton and Stone Harbor
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Stone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Templeton Limited and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging and Franklin Templeton is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Templeton Limited are associated (or correlated) with Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Franklin Templeton i.e., Franklin Templeton and Stone Harbor go up and down completely randomly.
Pair Corralation between Franklin Templeton and Stone Harbor
Considering the 90-day investment horizon Franklin Templeton Limited is expected to generate 0.33 times more return on investment than Stone Harbor. However, Franklin Templeton Limited is 3.04 times less risky than Stone Harbor. It trades about 0.14 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.03 per unit of risk. If you would invest 655.00 in Franklin Templeton Limited on November 27, 2024 and sell it today you would earn a total of 7.00 from holding Franklin Templeton Limited or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Templeton Limited vs. Stone Harbor Emerging
Performance |
| Timeline |
| Franklin Templeton |
| Stone Harbor Emerging |
Franklin Templeton and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Templeton and Stone Harbor
The main advantage of trading using opposite Franklin Templeton and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Templeton position performs unexpectedly, Stone Harbor can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Franklin Templeton vs. MFS Investment Grade | Franklin Templeton vs. Eaton Vance National | Franklin Templeton vs. Rivernorth Opportunistic Municipalome | Franklin Templeton vs. RiverNorth Managed Duration |
| Stone Harbor vs. Virtus Global Multi | Stone Harbor vs. Aberdeen Global IF | Stone Harbor vs. Cushing Mlp Total | Stone Harbor vs. Aberdeen Asia Pacific If |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |